Microsoft Must Find a Way to Innovate Again

5. Microsoft's brand is still not where it
needs to be
Microsoft
has worked hard over the last several years to improve its brand image,
especially its identity as the "Evil Empire" of the software industry. However,
now Microsoft is in danger of being viewed as a plodding, monolithic entity
that lacks insight into the new world. Its generally poor performance in the
mobile space as companies like Apple and Google succeed is only further proof
of that. Rather than spend so much time on Windows and Office, maybe Microsoft
needs to think of other products that can help it redefine its brand as a go-to
provider of something special.

6. It has the cash to do something now

Microsoft
has a unique luxury that it must take advantage of as quickly as possible: the
boatloads of cash that it has on-hand. In the tech space today, companies need
more and more cash to deliver a product that customers are after. But if
Microsoft continues to focus on Windows and Office, there's no telling how much
longer that trove of cash will be around. The smart move is to invest in new
technologies-namely the mobile market and the Web-as soon as possible. After
all, in a few years, there's no telling if it will still be there.
7. Apple is more of a threat than ever
Prior
to the launch of the iPhone,
few believed that Apple was much of a threat to Microsoft. Sure, the
company had the iPod and it was offering nice computers, but it was in no way a
serious competitor for Microsoft. After the launch of the iPhone, all that has
changed. Now, consumers are buying iPhones in droves as Windows Phone 7-based
devices are languishing on store shelves. If nothing else, Apple's mobile threat
should be enough for Microsoft to start thinking beyond its typical Windows and
Office mindset.

8. Tablet makers aren't coming around
Aside
from it selling PC accessories and some consumer electronics devices, Microsoft
is a confirmed software provider. But that might need to change. As the company
waits for more Windows 7-based tablet vendors to come around, a host of
companies are investing in Android-based devices. HP has its own tablet
operating system, even though it was one of the first to say that it wanted to
work with Microsoft in the tablet market. Considering the importance of the
tablet space, it might be time for Microsoft to think seriously about building
its own tablet and trying its luck as an Apple-like company. It simply cannot
be left behind in the tablet space because of its desire to follow the same,
tired model with Windows 7 in the tablet market.
9. It can't afford to trail in smartphones,
either
It's
not just tablets. In the smartphone space, Microsoft was late to the game. While
Apple and Google were delivering unique ways for consumers to interact with
software, Microsoft's operating system, Windows Mobile, was still delivering an
outdated experience. If that's not a good enough reason to think beyond Windows
and Office, what is? Windows Phone 7 is a good start, but it's just the tip of
the iceberg. Microsoft needs to start focusing a significant amount of its
time, cash, and effort on the smartphone space or it might lose that market-and
the accompanying advertising dollars that go with it.
10. They're becoming the only worthwhile
options
Beyond
the Xbox 360, which Microsoft products,
other than Windows and Office, are really still the hands-down choice for a
majority of customers? It's tough to say. Microsoft has major competitors in
every applications category. The debate on the market position of every single
product one might mention would be heated. That's an issue for Microsoft. A
company of Microsoft's size should have more than two (or three) big winners.
Until Microsoft acknowledges that fact, realizes that it's in trouble online
and in the mobile space, and sets out to change its luck, bad times might be ahead
for the software giant.

Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.